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Part 3: Caring for someone with special needs: Special needs trusts and finding the right professional to help.

How can you get started with creating a special needs trust?

Fortunately, there are solutions to the challenges that asset limitations present, such as creating a special needs trust. A special needs trust may help alleviate financial and quality–of–life concerns without rendering your loved one ineligible for federal and state aid. Such a trust—indicated in your will—can be funded through assets such as stocks, real estate, and bank accounts.

In addition, a life insurance policy can also be used to fund a special needs trust if you name the trust as beneficiary. When the policyholder passes away, the death benefit of the policy and any other assets indicated would revert to the trust and can be used as an income source for a loved one’s expenses. A trustee who can manage the trust must be named—other than your loved one. When considering methods to fund the care of an individual with special needs, familial financial situations must be carefully reviewed by an attorney specializing in special needs law. All beneficiary designations need to be reviewed and, if necessary, changed to specify the trust.

How do you find a special needs professional?

Developing a comprehensive plan for the care of a person with special needs requires a careful choice of professionals, including attorneys, accountants, health professionals, and insurance agents. Because of the complexity involved in developing a special needs trust and evaluating financial assets, any professional you contact should have the following:

  • Experience in special needs planning, with references available.
  • An understanding that both federal and state laws affect the drafting of special needs trusts.
  • Knowledge of all types of available government benefit programs, including Supplemental Security Income (SSI), Social Security Disability Income (SSDI), Medicaid, and Medicare.
  • An understanding of state-specific Medicaid benefits.
  • Knowledge of the fundamentals of estate planning, including wills, trusts, powers of attorney, and health care proxies.
  • An up-to-date understanding of recent changes in estate tax laws that could impact planning.
  • Advocacy referrals to assist clients.

So what’s next? Talk to others in your community, including parents, resource groups, and professionals. And contact your agent. When it comes to your family’s financial future, your New York Life agent can help you find solutions that fit your needs. And if you don’t have an agent, we’ll help you find one in your local area. Simply use the Talk to Us tab or the Consult an Agent form on the page, and an agent in your area will contact you at your convenience. Or click here to learn all the ways you can do business with us.

You can also learn more about planning for someone with special needs in our series:
Caring for someone with special needs: Where do you start?
Caring for someone with special needs: A look at federal and state programs.
Caring for someone with special needs: Assessing the costs of care.
Caring for someone with special needs: Guardianship and finding peace of mind.